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Medicare Supplemental Insurance
What is Medicare Supplemental Insurance (Medigap)?

Medicare Supplement Insurance, also known as Medigap, is a private insurance policy that helps pay some of the health care costs that Original Medicare doesn't cover, like copayments, co-insurance, and deductibles. Some Medigap policies offer coverage for services that the Original Medicare does not cover. Examples are the medical care when you travel outside the U.S or visit a doctor who does not accept Medicare, and charges an "excess charge."

Medicare Supplement Insurance policies only work if you enroll in the Original Medicare Plan. You must have Medicare Part A and Part B but won't pay any benefits if you're in a Medicare HMO or another type of Medicare Plus plan.

First, Let's Explain Medicare

Original Medicare is fee-for-service coverage under which the government pays the insured's health care providers directly for the Part A and Part B benefits.

Medicare Supplement policies can minimize Medicare co-payments and deductibles for covered services, but do not offer expanded coverage of long-term care services or prescription drugs.

Medicare Part A covers hospital insurance and for most people it is free. You might be required to pay for Medicare Part A if you were self-employed or didn't contribute to Medicare when you were younger. If you or your spouse paid Medicare taxes for less than ten years total, you would have to pay a monthly fee for Part A coverage.

Medicare Part B is not free. You have to pay a monthly Medicare premium, which comes out of your social security check. Medicare Part B (Medical Insurance) helps cover:

  • Services delivered by doctors and other health care providers,
  • Outpatient care,
  • Home health care,
  • Durable medical equipment,
  • Some preventive services like Pap tests, flu shots, and screening mammograms.

7 MUST KNOW FACTS about Medicare Supplemental Insurance (Medigap) Policies

  • If you have a Medicare Advantage Plan, you can apply for a Medigap policy, but make sure you can leave the Medicare Advantage Plan before your Medigap policy begins.
  • You pay the private insurance company a monthly premium for your Medigap policy also to the monthly Part B premium that you pay to Medicare.
  • A Medigap policy only covers one person. If you and your spouse both want Medigap coverage, you'll each have to buy separate policies.
  • You can buy a Medigap policy from any insurance company that's licensed by the state.
  • Any standardized Medigap policy guarantees renewable even if you have health problems. Therefore, the insurance company can't cancel your Medigap policy as long as you pay the premium.
  • Some Medigap policies sold in the past cover prescription drugs, but Medigap policies sold after January 1, 2006 aren't allowed to include prescription drug coverage. If you want prescription drug coverage, you can join a Medicare Prescription Drug Plan (Part D).
  • It's illegal for anyone to sell you a Medigap policy if you have a Medicare Medical Savings Account (MSA) Plan.(Source: Medicare.gov)

Medigap policies don't cover:

Long-term care,

Vision or dental care,

Hearing aids,

Eyeglasses,

Private duty nursing like medical and non-medical care

Long-term supports and services provided at home, in the community, in an assisted living, or in a nursing home. Individuals may need long-term supports and services at any age. Medicare and most health insurance do not pay for long-term care.

Medicare Supplemental Insurance Plan Details

Medicare Supplemental Insurance Plans

Medicare Supplement Insurance offers twelve (12) plans. These programs must follow Federal and State laws. Each plan has different benefits. The twelve labeled A - N, lists below. The percentage shows how much each plan covers. The co-insurance is active after reaching the deductible. This PDF offers a quick look at the standardized Medigap Plans A through N and their benefits. Note: Plans E, H, I, and J are no longer for sale, but you can keep these programs if you already have one.

  • Plans A through N, (with the exceptions of E, H, I, and J which are no longer for sale) pay 100% on Medicare Part A Coinsurance and hospital costs up to an additional 365 days after Medicare benefits.
  • Plans A through N pay 100% on Medicare Part B Coinsurance or Copayment with the exceptions of Plan K pays 50%, and Plan L pays 75%.
  • Plans A through N pay 100% of Blood (First 3 Pints) with the exceptions of Plan K pays 50%, and Plan L pays 75%.
  • Plans A through N pay 100% of Part A Hospice Care Coinsurance or Copayment with the exceptions of Plan K pays 50% and Plan L pays 75%.
  • Plans C through N pay 100% of Skilled Nursing Facility Care Coinsurance with the exceptions of Plan K pays 50%, and Plan L pays 75%. Medicare Part A (Hospital Insurance) covers skilled nursing care in a skilled nursing facility under certain conditions for a limited time.
  • Plans B through N pay 100% of Medicare Part A Deductible with the exceptions of Plan K pays 50%; Plan L pays 75%, and Plan M pays 50%.
  • Plans C and F pay 100% of Medicare Part B Deductible with no other exceptions.
  • Plans F and G only pay 100% of Medicare Part B Excess Charges as it relates to Medicare medical services. If you are on Medicare and go to a doctor who does not accept Medicare assignment (receive full payment by Medicare), s/he's allowed to have an "excess charge". This excess charge would be an amount above and beyond what Medicare approves for a particular procedure/doctor office visit.
  • Plans C through G, M and N, pay 100% of Foreign Travel Emergency (Up to Plan Limits).
  • Other Medigap Plans information to know:
  • Plan F offers a high-deductible policy plan. If you choose the high-deductible option, you pay for Medicare-covered costs up to the deductible amount of $2,110 in 2013 before your Medigap plan pays anything.
  • Plans K and L, after paying out-of-pocket limit ($4,800 for K and $2,400 for L) and the Part B deductible ($147 in 2013), the Medigap plan pays 100% of covered services for the rest of the calendar year.
  • Plan N pays 100% of the Part B coinsurance, except for a copayment of up to $20 for some office visits and up to a $50 copayment for emergency room visits that don't result in an inpatient admission.

7 Things that Medicare and Medigap do Not Cover but You May Need

  • Long-term care such as assisted living (for recovery purposes)
  • Dental and eye care
  • Dentures
  • Hearing aids and exams
  • Cosmetic surgery
  • Acupuncture
  • Routine foot care

8 Insurance Plans that are not Medigap

  • Medicare Advantage Plans (like a HMO, PPO, or Private Fee-for-Service Plan)
  • Medicare Prescription Drug Plans
  • Medicaid
  • Employer or union plans, including the Federal Employees Health Benefits Program
  • TRICARE
  • Veterans' benefits
  • Long-term care insurance policies
  • Indian Health Service, Tribal, and Urban Indian Health plans

COMPARE THE COSTS of Medigap Plans

Insurance companies may charge different premiums for the same policy. As you shop for a policy, be sure you're comparing the same policy (for example, compare Plan A from one company with Plan A from another company).

In some states, you are able to buy another type of Medigap policy called Medicare SELECT. (If you buy a Medigap SELECT policy, you have rights to change your mind within 12 months and switch to a standard Medigap policy. A great resource is the 2013 Guide to Choosing a Medigap Policy.

Carol Marak
Carol Marak

After seven years of helping her aging parents, Carol Marak has become a dedicated senior care writer. Since 2007, she has been doing the research to find answers to common concerns: housing, aging and health, staying safe and independent, and planning long-term.